in response to the president of the united states using the word it,nk hole" or didn't say i would know. >> i understand. it was a passionate conversation. specificrecall the phrase being used and that is all i will say about that. >> kiersten nelson will testify at a senate judiciary hearing about oversight of her department for homeland security. 10:00 eastern right here on c-span here the finance committee held a conversation hearing tuesday for the health and human services secretary. the hearing focused on prescription drug, medicaid and , and a largerams pharmaceutical research and manufacturing company. this is 2.5 hours.

>> i think we better get it going. the committee will come to order. to this morning's hearing. today, the committee will consider the nomination of alex -- to servee in the as the secretary of health and human services. i would like to welcome him this morning. i want to thank them for being here. thisillingness to serve in capacity, as well. he has his work cut out for them. health and human services is a massive, sprawling department that oversees trillions of dollars in spending and liabilities, encompassing all areas of our nation's health care system. confirmed, his

decisions will impact the lives of every single american. knowledge, experience, and most importantly, strong leadership. our nominee brings all of this to the table after nearly do decades of experience -- after nearly two decades of experience. hhs, mr. azare at played key roles in implementing policies, including the medicare advantage program. he was also a leader in hhs's response to the anthrax attacks shortly after 9/11, the monkeypox crisis, and hurricane katrina, just to mention a few. ar will beed, mr. az congress's prior contact.

he will be integral in providing access to care and giving nations -- giving patients more choices with regard to coverage. when we are talking about modernizing programs like medicaid, innovating the chip program, and reforming the will bemarket, mr. azar the administration's primary policy driver. he has made clear his intentions to address the growing opioid that continues to ravage communities across the country, including in my home state of utah. this crisis is robbing families of loved ones, employers, and able workers, as well as securities of the safety they once enjoyed. this is an important issue to everyone in this issue, but particularly to me and other members.

i look forward to working with to figure out how hhs can save lives. co-authored an act which is recently come under scrutiny with relation to the opioid epidemic. this law requires hhs to submit a report to congress regarding the obstacles to legitimate patient access to controlled substances. , so today i report would like to impress upon mr. of gettingportance this to congress so that we can make any necessary changes that may help to turn the tide of this epidemic. i hope to get this commitment to produce and release this report as soon as possible, once he is confirmed. he has expressed his commitment to succeeding in this important endeavor, and i believe his record shows that he has more --

that he is more than capable. there are some on the committee who have made up their >> for the high profile nominees that are coming for in this nomination. his experience or his qualifications. instead, we are hearing talk about supposedly revolving doors and non-existing conflict of interest. i would like to take just a moment to address some of the more prominent attacks we have heard. his work in the pharmaceutical industry and where he has been a senior executive in the last few years,

has disqualified him from serving in this position. i would hope that my colleagues standardsd setting that somehow working in the private sector is a knock against a nominee. apply to this one. azar is committed to fully adhering to requirements. in addition, he has committed to divesting any financial holdings that could present a conflict of interest, or even an appearance of such a conflict. we are not talking about anything unethical. we are not talking about a nominee looking to profit. experience in the private sector and dealing with the policies

and regulations that come from marknment agencies, are a in favor of a nominee's qualifications. himazar's work will give important insight. add that knowledge and background to the years he spent as a senior official at hss, you have an extraordinary resume. azaragain, i believe mr. is more than capable. mr.ny objective standards,, azar is well-qualified to serve at hss. i want to thank you once again mr. azar to be willing to go through this and to the willing to appear here today.

i personally look forward to your testimony. i would like to re-emphasize my support for the children's health insurance program and my commitment to making sure that it gets reauthorized. it is one of the most important programs that i worked on and got through. we have a bipartisan agreement. i believe it improves things for the long-term. the time for a short-term solution is over. it needs to be extended. i am going to do all i can to do everything to make sure it gets done. children, states, and families are counting on us. >> thank you very much mr. chairman. i very much appreciate you

convening the hearing. this is the first time that we have been together since chairman hatch has announced his retirement. i would just like to take a publicly what i mentioned to you over the phone. first, you have always been a gentleman. every member of this body feels that. we know about your passion. we know about your dedication. we know about the fact that you have always had an ear for your colleagues. youn when you and i talked, wonder what your friends are up to. you are always there with an ear. i would just like to note something that i do not think everyone knows.

boxer --tch was a chairman hatch was a boxer and best ballplayers know a little bit about endurance. just boxer picture 40 years in e ring. 40 years as a boxer. that is real endurance. i'm sure we are going to have other colleagues talk at greater length but since this is the first time we have been together publicly, i would like to note that and i also appreciate the fact that you mentioned chip. as you know, we have teamed up on this now for quite some time. that theike to think fact that we came out of the resulted in not

everything becoming bipartisan. we have got to get it done quickly. the american people said to me happenede break, what at the end of the year is that the kids got a patch? we are better than that. as chairman i just want to say that i am looking for to working closely with you. unanimously inve this house. we ensure that families across this country do not go to bed at night in near panic about the prospects of an emergency. i look for to working with you on that. today's is-- now, to this. -- business.

donald trump said almost exactly one year ago that drug hiking drug companies -- price hiking drug companies are getting away with murder. now, he has nominated someone with a documented history of raising prescription drug prices. mr. azar is now here with the committee. it is my view that the issues if confirmed are going to be defining issues. defining domestic issues in 2015. the american people heard a lot of promises two years ago about how great their health care would be under president trump. about how the era of sky high drug prices is over. americans are going to want to know come this november, if all of those big promises and pledges they heard in the wall

2016,6 -- fall of actually happen. mr. azar was the president from 2012 to 2017. he chaired it u.s. pricing reimbursement which gave him a major role over price increases for every product he marketed in the united states. hatch -- chairman noted, that our staff did a fair amount of homework and i want to spend some time looking at the record. drugs used to

treat osteoporosis more than doubled under azara's watch. another drug used to treat adhd, more than doubled. , used to of humanla treat diabetes, more than doubled. these are just some of the drugs under mr. azar's preview. zar told they, mr. aa never signed off on a decrease on the price of a drug. this morning, the committee in my view is likely to hear from mr. azar and his colleagues.

they will blame the system. is that there is a few -- fair amount of validity and that. the system is broken. was part of-- azar the system. azar has come up empty. he has confirmed that it will not be the first time that the president and their health care team broke their promises. health care officials have come before this committee and have promised to uphold the law with respect. right out of the gate, we itember tom price telling us would be his job to administer the law at hss. the track record does not look so greater. -- great there.

seems that it sure the sabotage policy kicked in. advertising budgets were slashed. it became harder for people having difficulty signing up for coverage to get in person assistance. they attacked a rule that says women have to have guaranteed access to contraception. unfortunately, that has been removed and held up in the courts. what has been particularly troubling to me is that the administration made it easier to sell junk insurance. all in all, the trump administration have made millions of peoples health care worse and there does not seem to be a serious plan to undo the

damage. mr. azar today will have to explain if you will continue that policy and he should not because his stance is an stark contrast with what he did when he was a member of the bush administration. promotingme to medicaid prescription drug benefits, which i was one of the it, hets that voted for toured like he was in the grateful dead. now he has tweeted less about open enrollment than about thanks giving safety. told me he -- azar believes that medicaid counts as welfare. thecomment thread to republican talk here is pretty obvious.

to programscuts that are of life i -- lifeline. support for struggling families. with respect to medicaid, for millions this program is at the heart of health care in america. it spans generations from newborns to 2/3 older people in nursing homes. today medicaid is built on a guarantee. the trump team says, it wants to end that. to make motions in plan it harder for a lot of people to get the care that they need. sometimes, it is folks with disabilities. in other cases it is adults with limited needs. is, kind of my background so i am interested in hearing what mr. azar has in mind with respect to seniors.

to me, risking the medicare guarantee, i want everyone to know that that is a non-starter here. furthermore, my view is that you cannot get ahead in life if you do not have your health. lower in the health of income americans is the absolute wrong way to go. there will be it -- other issues that fall under the welfare umbrella. i am one who feels that people with business backgrounds, those be -- viewpoints can meet -- welcomed. but it has to be in line with a set of values that i have. that is my sense of where we are and i would like to wrap up this way mr. chairman. the leaders on both sides of this committee previously, have had regular meetings.

a whole host of democratic representatives did the same thing. when i wrapped up the meeting with mr. azar yesterday, he noted that he would not go along with the last secretary. azar without any prompting said that he was interested in having those kind of meetings. beingar, thank you for here. thank you for our meeting yesterday and we look for to your statements. >> here to introduce mr. azar are two distinguished secretaries from hss.

>> it has been quite a while since i have seen you. you served as the head of hss from 2001-2005. servedo that time, he four terms as the governor of wisconsin. the longest tenure of anyone in that state's history. as governor he was the pioneer of a number of initiatives including welfare reform which gained national prominence. as the secretary of hss he said initialaw the limitation of medicare part d. next, we are going to hear from a very personal hear from -- of my -- mine. before that, mike served as the

administrator of the environmental protection agency for two years, as governor of utah for almost a decade. he had a number of national leadership positions. as secretary of hss, he sounded the alarm about medicare's long-term fiscal difficulties. both secretaries are a well-respected public servants. their opinion should carry quite a bit of weight around here. i know they mean a lot to me. i want to thank you both for being here with me today. we'll start with secretary thompson and then we will hear from secretary leavitt. >> thank you very much german hatch.- chairman

to thank you for this opportunity to appear before you this morning. before i start i would like to echo something that the senator said. mr. chairman, you have always been a friend, a distinguished member, a mentor to me personally, and always a great leader. i feel that today's meeting is somewhat bittersweet for me. sweet because i am endorsing my colleague, bitter because i have found out that you are leading -- leaving. pleased or the more prouder to introduce my friend and colleague, mr. azar. alex is an outstanding individual with a great family. well as,y is here as his father.

i'm here to provide my strongest personal endorsement and to tell you that he has the capacity, the capability, the until it to be an incredible secretary -- the intellect to be an incredible secretary. academiccredible credentials. the only thing i have against him is that he did not go to the university of wisconsin. i was privileged to have him as my general counsel when i had the honor of serving as hss secretary under george w. bush. excellentecretary -- counsel who developed a great understanding for hss. result, he deeply respected

and passionately was respected by the civil servants with whom he worked for. from his tenure as general counsel, he went on to serve as secretary of hss. it is important to live up to responsibilities. he successfully led a large and successful health care company and this country. the basis of my recommendation likability, he is one of the most important attributes. i know from personal experience that he is a very honest, dedicated, passionate, and trustworthy person.

he says what he means any means what he says. he is quite simply a man of great integrity. if the united states and its were to confirm him, the members of this great committee would have a double partner who truly understands the complexity of our health care system and human services program. further, i believe because he wants to take on these challenges, he would work you thereive we with -- collaboratively work with you. will do it, ie can assure you that he will. mr. chairman and all members of this committee, thank you for giving me this opportunity to help introduce alex azar.

>> thank you. those words are very strong and very good. and members ofch the committee. tom joint with my colleagues expressing gratitude. i joined as well today with secretary thompson and want to be completely associated with his comments about alex azar. i too, and equivocally recommend that he be confirmed as the 24th secretary of the health and human services. he is supremely qualified. too, along with secretary thompson, feel well equipped to be able to offer an evaluation of alex azar.

counsel when il became secretary. hss is a large, very complex federal agency. it not only looks after the nation's health care system, it looks after all of the human services that we provide as a country. much of the national medical and scientific research, it carries out a significant amount of responsibilities related to disaster recovery. mr. azar secretary, auctioned as the coo of the department. i delegated much of the day-to-day operations to his supervision. in that role he demonstrated a skill as a collaborative leader.

managementush had a agenda to improve the efficiency of the federal government. they had developed almost three areas of evaluation. have hssset a goal to to have every major green. he organized an effort among hss's 27 different operating centers and he met that goal. mr. azar is a man of good judgment. as secretary i delegated oversight of the departments administrative rulemaking responsibility.

and impartialerly way, he oversaw the rulemaking process and made recommendations to me as secretary that i learned to have great confidence in. he is a man of great judgment. i've missed -- i have seen mr. a's are under fire -- azar under fire. he is a stevie -- steady leader under fire. we were parent for what appeared to be a potential pandemic influenza. we were implementing medicare. mr. azar was measured and responsible. he establish priorities. he accepted responsibilities. should you choose to confirm mr. i want to assure you that you will find him as i did. i believe you will see

bipartisan communication rum mr. a's are -- from mr. azar. he is a person that brings unique expanses from the private sector. something that i believe will be of immense importance over the next several years. lastly, i will close with two final observations. the first is, alex azar by my experience is a very good person. he is a man of compassion. in myis an attribute opinion that is critical. based on his previous expanses, i do not know if there has ever been a person nominated before who is in the position to hit the ground running like alex azar. he will serve the people of the united states while. -- well. >> thank you both very much.

mr. azar we will turn to you right now. i have had a long experience with mr. azar. i cannot have a higher opinion than what i have right now. i am pleased that he has this nomination. >> thank you very much research airman. if you would not mind -- mr. c hairman. i am joint on my family -- joined today by my family. unfortunately, my mother could not be here today and most tragically, my stepmother just passed away. .hank you all an opportunity like this just

does not happen without family guidance and support. members of the community, a -- committee, thank you for this opportunity. i cannot tell you how to shyam to hear the words of the -- touched i am to hear those kind words. sherrod: i simply cannot think of two gentlemen from whom i have learned more. alex: it just means so much to be sitting here with you. i never thought that they would happen. i also think president trump for the confidence that he has the on me.on me -- bestoewed my grandfather who spoke not a out andenglish, stepped completed his long journey from lebanon to america.

he met an individual who is wearing a military uniform on ellis island. tot person possess the power admit him. that person was a member of the united states public health service. it is a testament to all that i love about this country. just 97 years after my , with note discernible prospects, his grandson might be in charge of that very same public health service as well as, all of the other will -- world renowned components of hss. through its outstanding leaders and career staff, hss is primed

to meet that challenge. the task is humbling. marshaling and leading the incredible resources of the require innovating. through the subsequent anthrax furtherthat prepared us for any nuclear attacks. in the implementation of our completely novel prescription benefit for seniors, and helping , andild flu preparedness our response to threats such as sars. through innovation in the

private sector, to bring life improving their peace to our people. finally, in harnessing the power of big data and analytics. department decides the scope of hss, it becomes difficult to prioritize. i do envision focusing my personal efforts in four areas. first, drug prices are too high. the president has made this clear. so by. jj -- so have i. believe i bring skills and experiences to the table that can help us tackle these issues while still encouraging discovery. second, we must make health care more affordable, more available, and more tailored to what individuals want. we all share a common concern

for our fellow americans. even if we do not necessarily agree on how best to go about addressing the challenge. under the status quo, premiums have been skyrocketing your after year and choices have been twiddling. we have got to -- dwindling.' must harness the power of medicare to shift the focus in our health care system to paying for sickness to paying for health and outcomes. we get better channel and leverage what is best in our programs to ensure that the individual patient is at the center of decision-making and his or her needs are being met with greater transparency and accountability. we must heed trump's call to need aggressive

prevention efforts to stop overprescribing and overuse of these legal and illegal drugs. we need compassionate treatment for those suffering from dependence. these are serious challenges. if confirmed i will work with the super team at hss to deliver results. i think president trump for this opportunity and i think this committee. >> they give her a much. you are really -- thank you ver y much. you are more qualified than most people i've seen. i am pleased that you are willing to sacrifice to come here and help turn this mess around. let me just ask this question, as you know i have fought hard toextend the chip program

support the 9 million families that rely on it. i think we will get this done as soon as possible. will havehappens, hss five years of runway to work with. what should they be doing to bolster chip and ensure its continued success? >> the children's health insurance program is such an important part of your personal legacy and i look forward to the reauthorization so we can secure that program for this year and years to come. it really serves as an important bridge and stable force for the children of our country and i look for to looking into any ideas that you may have in terms of implementation. anyways that we can make that

program more responsive. n. thank you mr. chairma particularly, i want to welcome your dad. in maryland and his father is a distinguished physician. i had a chance to work with him when i was in the state legislature so it is good to see that his family is here. the first question i want to ask you is going to be a colloquial one with maryland.

that is protecting some of the initiatives out of maryland. many states have come up with innovative ways to try to open our health care system. we just urge you to pay attention to these types of initiatives and be understanding that we may need some special attention to preserve this type of access to care. >> senator thank you and thank you for this wonderful meeting. alex: if confirmed, i would love to come home to maryland and spend some time with you and learn more about the ireland pproach. -- maryland a are all kinds of innovations and improvements

available at the state level. no one person has the right answers so i want to be supportive of you and the state of maryland. >> one of the major accomplishments under the affordable care act's was to elevate minority health and health disparities. also, to establish minority health offices. it is important that the secretary get directly involved in these issues. do we have your commitment that you will pay particular attention to this particular priority to make sure that we do right for minority health in america? >> thank you for your line -- long-standing commitment to that area. skin, where one's one lives, should not matter. we should be doing everything at

hss to ensure that everyone has access to care in the united states. >> i want to talk about one area that the trump administration has deviated. the so-called gag order that deals with services on contraceptives and other areas. i disagree with this policy because i think it comprises women's health in america. and compromises our ability to work internationally. the manner in which this was administered under the top administration has compromised our ability to work with international health organizations. are you willing to take a look at this to see whether we can get a more rational way? again, i disagree with the policy to begin with but the way

it is being recommended now is counterproductive to global health priorities and really does require some attention of the secretaries. >> senator, i am not deeply familiar with the ways under any ways that the implementation have changed. as i know, there have been some differences and i want to learn more about that and would be happy to discuss it with you. overarching you the view that the united states needs to have the international health in mind. i'd be happy to look up at issue and learn more and more about any changes that were made and learn more about that. >> you mentioned drug prices are too high in this country.

we all know that. globally it is even more out of step. tell me how you intend to address this issue of ringing down the cost of prescription drugs? >> they give senator. -- thank you senator. anyone else coming in a secretary, this is such a complex area the learning curve for any other individual would be so high. we need to deal with issues of competition. we have robust competition. i want to make sure we create a very viable market to compete against branded companies. that is critical. i also want to make sure we go after any type of exploitation of exclusivity's.

i thought it guesses when i was general counsel, i developed a rule that would change regulations that saved $34 billion for patients over 10 years. there is no silver bullet here. there is not one action that all of a sudden fixes this. i want to hear ideas from others. the most important thing to figure out is if we can reverse incentives on list prices. work with this committee and anyone who is smart and thoughtful about if we can create incentives that can pull down the list rises so when a patient walks in needing to pay out of pocket, they are not stuck with that kind of cost. that is one of the ardor issues to solve but i am deeply committed to work with you on that. >> i have some obligatory

questions. first, is there anything you are aware of in your background that may represent a conflict of interest? >> no mr. chairman. ofill follow the advice officials to make sure that i manage any potential conflict that come about through the ethics approval as part of the confirmation process. alex: no mr. chairman. >> do agree it without reservation to respond to any reasonable summits to appear and testify before any committee of congress if confirmed? sherrod: yes. >> do promise to provide a prompt response? alex: yes mr. chairman. >> as i promise you in my

office, you will know about the questions that i will ask. i'll have two questions. the first involves the sunshine act that i worked hard to pass and is part of obamacare. the background to my question, and march of 2017, the university of iowa reported a growing crisis of prescription opioid use and overdoses in iowa. while lower than some states, iowa has seen rates of prescription drug debts quadrupled since 1999. i also think it is important to protect patient access to needed medications. one strategy to achieve that balance is to ensure that decisions are made in the best interest of the patient and not fromresult of influence drug care companies.

the affect on opioid prescribing practices. to sunshine act was designed provide transparency regarding payments from drug companies. this law created the open payment data base at cms. wrote a letter to your department thinking for the -- thanking you all for the support. in that letter, we further encourage the prioritize asian of the open payments database. you may wonder why i am asking you this question.

one year ago, i think it was in , and we prevented that. will you commit to continuing to collect and post all of the data currently available on the open payments website? alex: yes. as you know, i am a big supporter of the sunshine act and your work there. i think that transparency is extremely helpful. >> my second question. the misclassification fiasco, i focused a lot on the medicaid rebate drug program. id because of my oversight, found that during the obama administration, cms did not

properly oversee the program which resulted in billions of taxpayer losses. lost outyers may have on more than $1 billion. doj recovered $475 billion. why they did not go after the other billion, i never get an answer. was --mber 2017, the hass released a report on the rebate program and found that hundreds of drugs were potentially misclassified. for example, out of a sampling 2016,st 10 drugs from 2012-

medicaid may have lost billions in rebates. we do not know how many billions of dollars may have been lost. by the way, i would also like to have submitted a letter that i have from a former cms administrator on the record. this question, there is a lot of taxpayer money at stake here, how will you approach fixing the medicaid drug rebate program so that it is properly overseeing and taxpayer losses are kept to a minimum? >> i was very concerned to see the media reports on the rebate rogue ramp. -- rebate program. i will work hard to ensure that the row graham is improved. alex: one of the key issues i think to ensure is that the regulations are clear.

if necessary, moving to enforcement to ensure that they understand that these are obligations that need to be held up. >> thank you because during that you can save a lot of taxpayer money. i'm going to ask you questions about these price issues. certainly, if you have any questions we welcome your comments. during the five years that you directsident, you had responsibility for pricing strategies of the bio addison's unit.- biomedicine's you also chaired the u.s. pricing committee. i'm going to quote from a written statement to the committee. " asaid to the committee,

as a leader for the biomedical business industry, i approve pricing recommendations. " during your time in these positions, based on the committees investigative team, the company's annual report shows the annual revenue 70creased 58%, reaching $7 2017.n in each year the company told shareholders that revenue increased because the price went up. you have told the finance committee that you are responsible for fixing the price. this chart that we are holding up shows the wholesale package

price. , we show thetch red line of the price going up. the blueline, is before you became president. the price more than doubled on your watch from a little more $27,000.0 to the wall street journal recently showed how these guys affects consumers -- price affects consumers. mr. azar, this certainly

indicates the wholesale price in fact, morestates in than doubled on your watch. yes or no? alex: i believe that data is correct. now atme take a look another drug under your purview. attention to treat deficit hyper disorder. this chart shows how the price of the drug changed over the year. again, the price before you became president, is blue. , while you were president was read. -- was red. this was another big jump in uprising that began shortly

after you became president. if these were isolated incidents, it could be written off as an anomaly. financial report shows that during your time on the committee, when you ran that, higher prices drove u.s. revenue for drug even when demand for the products fell. one more question in this line of questioning. u.s. pricingf the committee for this company, did of aver lower the price drug sold in the united states? drug prices are too high.

>> that is not the question. did you ever lower the price? alex: i do not know. every incentive in the system is towards higher prices. that is where we can do things together. no one company is going to fix that system. that is why i want to be here working with you. >> let the record show that when that specific question was asked , he said, no. let the records show that that is what we were told. now, we are going to have to make some judgments about how you are going to approach issues

of helping to shrink pharmacy receipts. i have talked about legislation that i've introduced that would ensure that the consumer got the price reduction at the window. ing doucette legislation so i will have to ask if you will urge the president to support it? you mr. chairman. let us move the nomination of mr. azar to the senate. it is a role that should not sit vacant. there are too many vital priorities in health care that need immediate attention and i appreciate you moving forward. i also appreciate mr. azar's willingness to serve. in my meeting with you, i was

pleased to get your top priorities. appropriately, he will be focusing on the affordability of prescription drugs. this is something that everyone around here knows about and hears from constituents about. the problem is complex and does not have a simple solution but i am very encouraged to hear his commitment to taking this on. andas real expertise understanding of the manufacturing side of the equation. this is something that i believe can and should have bipartisan approach. i hope to hear that kind of commitment from a colleague's as well. have's are -- azar you restated your priorities. i completely agree that these are where the secretary's focus must be and i work for two

working with you to get that job done. mr. azar has met before the senate before but this environment is obviously different. i am surprised by his willingness to go through this very difficult process. question, the department of health has had a medicaid waiver application sitting at the centers for medicare and medicaid services for over two years. it is a tribal uncompensated waiver. underr stand that it is consideration but i would --ourage expert -- and expedition. with you doctrinally being in the position are not able to however, iit but would appreciate your commitment to examining this application as

quickly as possible. senator thank you for raising that and thank you for taking the time to meet with me. i do not know the parameters but i will tell you i am very concerned about the amount of time that you have mentioned. ensure that if i'm confirmed as secretary, they will work with the state on any of these waivers. confirmed, i will get on that right away. about have also talked your priorities on drug pricing and that seems to be the topic here. toppreciate the willingness take on that very serious and obligated issue. i appreciate the background that you bring to the issue. i know that is not a finalized

agreement. i know there is not long-term data showing how these type of arrangements work but it seems like an interesting approach and one worth exploring further. what is your view of contracting in the private sector and the possible applicability to public pairs like medicare? alex: i think outcome waste contracting-- based can be vitally important. i think there are some of the regulations that we have within medicare that actually get in the way of that. when i was doing this in the private sector, i wanted to be able to put our money where our mouth was. if it does not work, take a greater discount. some of the rules around government price reporting can be a barrier. i think there is actually rarely oad bipartisan

support on that. i think that can be an important part of how we think about drug pricing and value for taxpayers. appreciate the expertise that you bring. thank you for being willing to serve. thank you mr. chairman. i first want to personally thank you for your commitment on the children's health insurance program. i have a real sense of urgency about this. welcome to your family. you have indicated that you will hit the ground running and my question is, and what direction will you be running? of otherhe concerns

senators in terms of what happened when you are at eli lilly. insulin and the fact that that particular product is so critical for people with diabetes from 1996 to 2017, went up 700%. and during the time you were at eli lilly, it also doubled. price, so i'm wondering when you say drug prices are too hight, do you ,gree that the price of $255 for humalog, for one vial and multiple are needed, do you believe $255 for one vial is too high?

boardar: across the products are too high. , insulin is too high, all drug prices too high in this country. the increases, this is what is so bizarre about the way the system is organized, that those price increases happen. and my former employer has said this publicly. during that same period, net realized price for the company stayed flat. and yet the patient who is , walking into the pharmacy, just to cover for increased rebates, the patient walks into the pharmacy whose insurance may not be paying for that is absorbing that cost. that's what i want to work with you to try to solve. stabenow: well, first of all, mr. azar, insulin was first approved 100 years ago so any cost to the company to recoup r&d, in addition to what taxpayers pay for would already have been done. i appreciate that you say it's too high. yet in that position, with this system, you doubled the price. so you were taking advantage , certainly, of that system. that was a choice that you had

as president, which is of concern to me, because i'm assuming the price of manufacturing the insulin didn't double. is that correct? mr. azar: i don't have the data. i didn't run the diabetes business unit at lilly, so i don't have the data on the price of manufacturing, but the system it works for those players in , the system, but it doesn't work for for the patient walking to the pharmacy. stabenow: let's talk about how to make it work. mr. azar: i would love to. enow: president trump has been back and forth on this but he said in the past he supports negotiating prescription drug prices. do you believe the government should negotiate prescription drug prices? mr. azar: i think where the government doesn't have negotiation it's worth looking at.

one of the things i talked about is in part d., we do significant negotiation through pharmacy benefit managers that get the best rates of any commercial payers. we don't do that in part b, which is where we have physician administer drugs. we basically pay sales price plus 6% or some other number. ms. stabenow: just in the interest of time i'm really -- i , don't mean to be rude but in the interest of time you're saying yes to negotiation of prescription drugs. mr. azar: where we can do so preserves innovation, access for patients, i want to look at anything that's going to help us with drug pricing. in part b i think we should be looking at those approaches. ms. stabenow: national academies of science, engineering and medicine has indicated that buyers in the biopharmaceutical sector, buyers often appear to be in a weak position with little alternative but to purchase the drug at whatever the price. they recommend, they say the effect of not allowing hhs to negotiate prices is to tilt the bargaining power further in favor of drug manufacturers. now, part d, as it was originally in the past, basically prohibited. it was on the side of the drug

companies, saying you cannot negotiate, so do you support changing the law so that under medicare part d you can negotiate on behalf of seniors and the american people to bring prices down? mr. azar: so right now negotiation is happening in part , d. it gets the best rates there are out there. the national academy, they are just wrong on that. these are incredibly powerful negotiators who get the best rates available. stabenow: so- when they say it is in favor of the drug companies -- mr. azar: they are incorrect. benow: disagree with that. mr. azar: for the government to negotiate there, we would have to have a single national form later i don't think we want to go there.

stabenow: they just recommended that negotiation be drug against opioid addiction. would you support that for that drug? senator, i would look at that, but if the purchaser, so,he for example, we are buying that as part of the program and supplying that to first responders there's absolutely , nothing wrong with negotiating that. i did that with another drug during the anthrax attacks. there is nothing at all wrong with the government directly negotiating with the purchaser and that a person supplying that out. i need to learn more about that issue from within the government. enow: thank you, mr. chairman. thune: thank you.

i think we all share your priorities of lowering the cost of health care and prescription drugs. i hope that based upon your past experience in the industry, you understand and can help us with suggestion about how to get those drug prices down. because that is an incredibly important part of health care today and an incredibly costly part, unfortunately. so i look forward to working with you on these issues. and we have discussed this previously but we have providers in south dakota working to innovate and ensure access to care for folks in rural areas and in indian country, yet we have a lot of challenges that exist. for years being in health facilities in south dakota have been found to have serious deficiencies and poor quality of care. for instance, pine ridge recently lost its ability to bill medicare and medicaid for failing to meet cms standards. this has to change. and i've been working with

senators brasso and another on restoring the ability in the act to give hhs authority to get ihs back on track. specifically the bill would give hhs the authority to terminate poorly performing employees, streamlined the hiring process and create incentives for , quality providers to remain on the job. is this something that you agree you could work with congress to achieve? mr. azar: absolutely, senator. i look forward if we could get those additional authorities and also look forward to any ideas you have. it's unacceptable for us to not be providing high quality service there. mr. thune: ok, appreciate that, and look forward to working with you and your team. as you know, i've been supportive. i share this, i think, as well with you on finding solutions to address the application of medicare competitive bidding rates in noncompetitively bid areas, an issue that south dakota medical equipment providers report has caused

supplier closures and gaps in medicare beneficiary access. hhs was supposed to have issued a report to congress. this came per the 21st century cures act on beneficiary access by january 12 of 2017. i am not aware the report has been completed, so i'd request that once confirmed you would work to have that report completed quickly. additionally, if confirmed, i would ask that you commit -- will you commit to working with the office of management and budget to quickly approve the interim final rule to provide relief for rural providers that have been -- has been pending , i should say, the rule has since october of 2017? yes, i would be happy to work on those issues. thank you. : thank you. in the face of provider shortages, south dakota's health

systems increased access to care in rural areas through telehealth. you may be aware several senators working on the connect for health act which would further expand use of telehealth in remote patient monitoring in medicare. importantly one provision of , that legislation would provide secretary of hhs the authority to waive certain restrictions in current law where telehealth would reduce spending or improve quality of care. if confirmed, would you support congress enacting that provision to provide you the discretion to expand access to telehealth services? mr. azar: senator, as we had the opportunity to discuss together in our meeting, i am a big supporter of telehealth, an alternative means of providing care, especially in rural communities. i think sometimes we can be penny wise and pound foolish. mr. thune: thank you. i look forward to working with you and your team on that as well. it is something that has tremendous potential to deliver benefits to areas of the country for which in many cases it's difficult to get delivery of health care services in a timely and cost effective way.

so thank you for your answers to those questions. we'll hold you to them and follow through with you and look forward to working with you once you're officially installed there. and it's a big job, as you know, with lots of moving parts, lots of challenge, but also lots of opportunity to really make a difference in the lives of people who in this country need action to more affordable health care services. mr. chairman, with that i yield , the balance of my time. chairman: senator kennedy. i mean, senator casey. casey: mr. chairman, thank you. i want to reiterate what senator stabenow said earlier about your service. we commender work that you've. -- we commended the work you have done in the children's health insurance program. thank you for putting yourself forward for service in the

federal government. it's good to see your family. you and i have common state roots, scranton and johnstown. but despite those commonalities, we have a lot of disagreements on health care policy. and i wanted to explore that. first and foremost, appreciate the time you spent in our office going back a couple weeks ago when you were coming before the health, education labor pensions , committee, a committee of which i'm a member. at that time we talked a good bit about health care policy, in particular medicaid, which is a program that i think many americans appreciated over many years but probably never more so or never with greater urgency than this year, when there are proposals which in my judgment, i think in the judgment of a lot of folks who followed health care policy for their whole lives, a lot of concern that medicaid would have been decimated by some of the

proposals this year that were put forth. i tend to focus on it not only in a programmatic sense but people sense when we get letters from families concerned about medicaid. i got a letter last year from pam simpson. she's from southeastern pennsylvania. she was talking about her son rowen. this is the letter she sent me back and front. , a picture you can't see from where you are. she concluded the letter by making a plea to me to protect medicaid, because her son rowan, she described what life was like without medicaid, which we call in -- call medical assistance in pennsylvania, how much better it was, all of the treatments and therapies and benefits that rowan received. she ended the letter talking about -- or as i said pleading with me to make sure we take steps to protect it, saying that we should think of her and her

husband and their inability to make ends meet without medicaid, obviously to focus on rowan's life with it, and also, she said please think of my daughter luna, a little girl actually younger than rowan. he was only at the time about 5 years old saying she will have , to care for him when we're gone because of his circumstances. but here is the last line of the letter. she said we're desperately in , need of rowan's medical assistance and would be devastated if we lost these benefits. that's what one mom said about her family and her own circumstances. i guess i would ask you a broad question. if the proposals put forth in all the republican health care bills this year were enacted into law or -- i should say and/or if the proposals on medicaid and proposals i think you support would become law, would rowan simpson lose his medical assistance? mr. azar: so as you mentioned,

, first, we're from the same state. i think we actually share a lot of the same goals for people for access to care, folk access to insurance, access to quality. sometimes we may differ about role of government, size of programs, techniques, whatever, but we share that equipment. i share the equipment to the medicaid program. it's a vital safety net program for our folks. i don't know that individual's particular circumstances and how they qualify for medicaid. but obviously for so many families medicaid is a vital link or bridge to independence eventually or long-term need for them. and if confirmed, my job is efficient, effective and responsible to everybody as possible. casey: well, as you know under current law, there's a , guarantee. as long as you're eligible, or i should say some are eligible,

some have a guarantee by way of their disability. but even significant means, jobs and health care coverage can avail themselves of medicaid because of a disability. my question is will that guarantee remain in place not only for children with disabilities but for adults as well. mr. azar: i think whatever we do in medicaid, we've got to make sure it's doing its job. for an individual like that with disabilities that needs to be categorically in, we have to make sure it's funded and supported to do its job for them. mr. casey: i'd also ask just in the context of adults, and i know we're running low on time, if you have an individual that relies upon a disability service provider, someone who needs a wheelchair, durable medical equipment, will those individuals continue to get those services? mr. azar: again, any type of reform that's the situation we have to look at to make sure we're still able to deliver for those individuals. chairman, i know

we're running low on time but i'll try to come back in the second round. thank you. mr. portman: thank you, mr. chairman. i have had the pleasure of getting to know alex azar in his previous roles in government. in fact, when he worked in the bush administration at hhs, i got to see him in action. i can tell you from personal experience, he knows his way around the department. he's got a lot of integrity, a lot of friends and allies here on the hill from those days on the jobs. in fact, you would not know it today by some of the comments made here today but he's , actually been confirmed twice as general counsel and secretary. both times, it was by unanimous consent. so not a single member objected. that's because he's got the experience, he's got the background, and i'm glad someone with his experience is willing to step forward, because, frankly, we have got a lot of challenges, and it is a big, complicated department. in our conversations we spoke a lot about the opioid commitment, what can be done. hhs plays a central role.

right now helping us implement comprehensive recovery act through samhsa, cdc, medicaid, medicare in particular. so this is all going to be part of your bailiwick should you be confirmed. there is an issue that has a very specific hhs that i want to get your views on today. i'm not sure we talk about this specifically in our meeting, that's improving access to care. this has been something many of us worked on over the years. senator durbin and i have a bill called the medicaid care act, which would lift this medicaid institutions for mental disease exclusion, otherwise known as imd cap. this for residential treatment programs, as you know. it is crazy to me that there is a cap of 16 beds on some of the really good, successful residential treatment programs in ohio that i visited. they literally turn people away because they don't have the ability based on their taking

medicaid and being involved in the program to be able to have access. it makes no sense. i understand why it was put in place in the first place, why on the mental health side, fight back against institutionalization, so my question would be knowing cms tried to be supportive. the waivers supported in some 11-15 cases, but still, a lot of restrictions. would you support legislation, ours raises from 16 to 45 beds, for instance, and we have some pay fors we're working on. would you be successful in those efforts? mr. azar: obviously as a nominee , i can't commit the administration. i don't understand restrictions , especially in the face of opioid and pressing demand and need for treatment of those individuals. i'd love to work with you on that if i'm confirmed as secretary. i don't get it and i'd love to , work with you on it and fix

it. mr. portman: i appreciate the answer. not something you expected me to raise. i'm not sure we talked about it in our meeting as much as other issues that had to do with the prevention and treatment side. but thank you for that comment. that's another reason i think you'd be good in that job. we need to get that cap raised. again, we have to pay for it. we understand that. we have some thoughts on how to do that i think it's absolutely crucial in my state and so many other states getting hit so hard by this opioid epidemic. another you talked about was wellness and prevention. you touched on it in your comments to kind of rethink how we approach health care in the country, paying good health, which includes in my view providing incentives for wellness programs. senator wyden has been in on this. we have introduced legislation on this, called the better rewards bill. it basically says for medicare beneficiaries, they would be given an incentive program to be able to help them with whether it's smoking cessation,

heart disease, diabetes prevention things over time will , save the government money but most important to me, make their lives more healthy so they can live longer, healthier lives. it's worked in the private sector. there is no question about it. cleveland clinic in ohio the best place for that, where they have put this in place for their own employees and have seen enormous improvements in their health. by the way, it's a modest incentive. i know it works, works in private sector. among seniors, it will work better. my question for you, senator wyden and i are looking at maybe trying to make some changes for the legislation, because, frankly budget office doesn't , give us the score they should in my view. what is your view of this kind of legislation? would you support it? and i don't think it should be limited to medicare. i think medicaid also has an application for this kind of prevention wellness program. mr. azar: so, senator i have

, long been supportive of these types of wellness programs even when i was deputy counsel at hhs. we looked at regulations around hipaa to enable these types of programs in the first instance and happy to work with you on. i do think it comes up so often that where medicare and medicaid were designed in the '60s, we will pay for this, we will not pay for that, and now, 40 or 50 years later penny wise and pound foolish , saying what we will or won't cover because it doesn't fit in a category even if it's going to better and save us money. casey: thank you, and i look forward to working with you. chairman: thank you. senator nelson. mr. nelson: thank you, mr. chairman. it's either congratulations to you but also thank you for four decades of extraordinary service. and thank you also for your personal friendship.

mr. azar, there's a lot of chatter up here about now we've got a trillion and a half dollar hole additional budget deficit over the next ten years that's added to the national debt. there's a lot of chatter among our republican colleagues that we need to make up for that. so they are specifically looking at social security, medicaid or medicare under the guise of so-called, quote, welfare reform, and of quote. tell me, do you think in welfare reform that it ought to be medicaid, medicare and social security that would be cut?

i am not so, senator, involved in discussions right now. i am a private citizen. i not involved in discussions am about what's being contemplated. i am not aware of cuts -- nelson: i'm asking you for your opinion. you don't have to comment on what all the republican senators are saying. your opinion. would you consider an order to make up this huge budget deficit hole cutting medicare, medicaid and social security? mr. azar: the president has stated his opposition to cuts to medicare, medicaid or social security. he said that in the campaign. i believe he maintained steadfast in his views on that. and my view as secretary would be to enforce that. mr. nelson would you advise him : to keep his word? mr. azar: he's kept his word. i would stick with him keeping

his word on that. but i don't have the broader context of any discussions going on. i'm here on the sidelines. he's made that commitment. i will live up with that if i'm confirmed to keep his commitments. mr. nelson: what was the last hhs secretary made some interesting statements about what he preferred. i'm curious as to what you prefer. do you support raising medicare eligibility age? mr. azar: so i have not voiced support for that. that would have to be considered in the context of everything else. what we have to do, senator, is make sure that medicare is going to be sustainable for our beneficiaries over the long run. i know you agree with that. we need to come up with the right approaches. i, frankly, would like us to run medicare more efficiently and effectively more to driving , value and outcomes. and i think you can stretch that program and make it more sustainable over time just by how we operate it.

we can also as a result of that lead to transformation and broad erer health care system. that's where my energies are. mr. nelson: well, let the record reflect that the witness did not reject increasing the medicare eligibility age. i might say if you get out with the people, you might run into people who get into their sixties, and they are just holding on for dear life because they don't have any health insurance until they get 65, because they get medicare. they don't want it expended. are you aware of a voucher program? mr. azar: i'm not aware of turning it into a voucher program. what i really want to do, again

is make sure our medicare , advantage program which , two-thirds of new enrollees are signing up for medicare advantage and i played a role in helping to launch i think is a great option for seniors as they come into the program. they are liking high levels of satisfaction. i want to make sure we're going everything we can for a strong, robust alternative. again, that's where my energies are, my thoughts there. mr. nelson do you support : closing the doughnut hole in the medicare law? mr. azar: closing the doughnut hole? the affordable care act did have funding that helped senior citizens when they arrive at the pharmacy. i think it gives up to 75% coverage in the doughnut hole, which i'm very supportive of. mr. nelson: yes. you are? i've keeping all of that? mr. azar: yes. tell me about medicaid. what is your idea about medicaid? mr. azar: well, i want to make

sure we run the programs in ways that meet the needs of the citizens. as i said to the senator earlier, i want to make sure working with the states, who have the on the ground responsibility that we're being , responsible and responsive partner of theirs looking at , flexibility, trying new things. mr. nelson excellent. : excellent. chairman: your time is up. mr. nelson how about puerto : rico? puerto rico. medicaid for puerto rico. it's a block grant. it cuts off. mr. azar: we all need to work on that puerto rico cliff issue. i agree with you. we need to work to find solutions there. chairman: senator scott. mr. scott: thank you, mr. chairman.

mr. azar, good morning. thank you for being here. i know that drug pricing is very important. i think also beyond drug pricing, so is the issue of health insurance cost. very important. south carolina four years, 120% increase, last year 31% increase on the exchange. there's no doubt that we have to find a way to rein in the prices our consumers are being impacted by in the health insurance arena. one of the way we do that section 1332 waivers giving states more flexibility, at the same time looking at the aca as foundation because we have to. , catastrophic plans are limited to 30 years old and below. i have legislation co-sponsored by senator carper, warner and cassidy that would allow for cat -- catastrophic plans for those who want and need coverage. one of the things i have criticized in the aca, design plans are not suited for individuals who want to buy the plans. so as our next secretary, what would you do to expand consumer choice and encourage americans to make healthy, proactive decisions? mr. azar: so i think in terms of

the affordable care act, i'm glad you raised the issue of increasing premiums and lack of choice that you're experiencing in south carolina. i believe if i'm confirmed as secretary, i have a very important obligation to make whatever program that i am entrusted with to work as well as possible. mr. scott: yes. mr. azar: what we have is not working for people. it is not working for the 10 million in the individual market fully. so for many of those people it can be false insurance card, insurance but very high deductible or not having access to providers. so it's unaffordable use of care. i want to solve the program for them. mr. scott: good. mr. azar: i want to solve the program as you just mentioned for the 28 million people who sit outside of that market still, who don't have access in that individual market, and by not being in that market are actually causing the premiums to go up for the 10 million in it. so can we make those offerings?

can we create more choice and make those offerings more attractive to create a better risk pool that is going to help the taxpayer and people in that market? i fully share that commitment. i want to work with states on these 1332 waivers and work with our authorities to try to make that health insurance more affordable, make it real insurance, and make it tailored for what they feel they need. mr. scott. the question for you is on opioid crisis we are having throughout the country. in 2016 there were 61,000 deaths related to opioids. that's a crisis. in south carolina 616 folks lost , their lives, 9% increase. i would love to hear your commitment, not only to address the issue from washington, but to get outsides of washington. let's go to the rust belt. let's go to the places where people are suffering today because of opioids. let's create remedies that actually work, that are not top down simply but truly bottom up.

evidence suggests the best remedies so far have been created through collaborative effort starting local level and moving its way up. i would love to hearing you commit to not only running hhs but going to places in west virginia where they have the highest per capita, 41 out of 100,000 deaths associated with opioids, places like myrtle beach where we have the highest level in south carolina. but if we're going to understand and appreciate this issue in a very favorable way, we're going to have to do so by putting a face on the issue, not in washington but somewhere around the country. are you committed to actually going to those places with us? mr. azar: absolutely, and, senators, you know i'm a hoosier, so i'm right in the epicenter of the crisis also in indiana.

it is not a one size fits all approach, and we have to see. this is not just to support them but because we can replicate them. .e have these epicenters we can do things at the center with regulatory authority, with education programs, etc.. we have to drive solutions on this crisis. scott: i only have about 30 seconds left, so i will not ask a question but will make a statement. will be helpful, when you look at the opportunities of the future, there are a lot of opportunities coming, improving the life of everyday americans imaginewe cannot even five years, 10 years ago. i would love to be of to find ways to have access to those life-changing opportunities affordable. through, as we think drug pricing, i think we also

have to understand and appreciate the necessity of alternatives and the pipeline. things you aree thinking through for an expeditious approach to nonaddictive remedies, as well as things that eliminate abuse or provide a deterrent. that last point, that is a core area in the public-private arena to deal with the nonaddictive issues for the opioid crisis. >> acknowledging and recognizing your great service to this committee. we are going to miss you. i very much appreciate our opportunity to work together and the fact that when you have the opportunity, you kept me on these committee -- this committee, so i am grateful for that. azar, it is good to see you

again. there are good policies that we can implement. in many ways, americans pay for the r&d. we can make programmatic changes here, but some of this also has to be. with in our trade policies. with the nations, we pay the with ourercentage prices. you bring more than a little experience to this matter, and your role at eli lilly was involved in pricing issues. what you think about how we bring down america's cost of vis the cost of drugs in the world. mr. azar: sen. collins: for meeting with me.

about this.d europeans, canada, japan were not paying their fair share. they start investing more at the framework program at the european union and some of the funding there, but on the commercial side, they are not paying more, and they are able to have socialist systems, single-payer, with formularies, basically take it or leaving -- take it or leave it pricing. with trade negotiations with the factding partners, that they are not paying, but that, of course, does not solve the pricing here. that helps with relieving some of the burden abroad. we have got to address that here with some of the measures i have talked about, and with other measures, i would like to hear other measures you are others have. we're going to solve this issue at the list price level and net price systemic savings level.

mr. warner: how much more transparency should we have after companies raise prices in terms of rational. it seems like a mismatch. mr. azar: i'm in favor of more transparency in the system. i think it's helpful. we have to be careful around pricing to make sure we're not doing something anti-competitive or counter-productive in what we're trying to do. but if you've got ideas there, i do think transparency can be part of the solution as we bring understanding writes the money flowing in the system, who is getting the benefit from it and what's the benefit or harm to the consumer? mr. warner: i have to tell you as someone who for a long time did accept the premise we need to do r&d here, that argument has run thin with me as we've seen americans disproportionately bear this burden. we're going to need more radical system than we have in the past. i'm going to touch on two other items. i know in your statement you said harness the power of

medicare to shift the focus of our health care system from paying to sickness and paying for outcomes. obviously everyone makes those , comments. one of the things that came out of the affordable care act was cmi. and, you know, i hope that while it has not been as productive as i would have liked to have seen at times, i think it is still a tool that is useful and would like your comments on what you would see as the role going forward. mr. azar: cmi is an important leg to drive this transformation, our health care system through medicare. we need to idiate, pilot and generalize. mr. warner i would hope we : realize some of those pilots may, we might have a disagreement on this may include one, mandatory pilots because too often those on the voluntary system are the ones able to bring about efficiency. we need to force more into the

system system. mr. azar: senator, we actually do not disagree there. we have to test hypothesis. if we have to test hypothesis i want to be a reliable partner, transparent in doing this, and follow appropriate procedures. but to test a hypothesis on changing health care system it needs to be mandatory as opposed to voluntary to get appropriate data, then so be it. mr. warner: let me get my last bit in 15 seconds. an issue senator isaacson and i have been working on for a long time advance care planning, made alife, and cms major step forward a few years back where they went ahead and put a coding in for that consult. i would like to get you on the record in terms of recognizing we don't want to limit anyone's choices but we also want to honor and respect people's choice about care planning and end of life issues. mr. azar: i think it's a very important part of all of our personal care management and life as we think about our life

and health care and family members that we engage in that kind of thoughtful, directive planning of what do we desire. as you said, none of us, not about imposing anyone's views, actually about ensuring to respect that. enabling that is very important. mr. warner: thank you. chairman: senator heller. thank you. mr. azar, welcome and congratulations. thrilled to have you in front of our committee. i welcome your family also that are being very patient through this hearing. i may ask you questions that have already been asked because i've been down at the banking committee and going back and forth here. i apologize if anything i do or say is duplicative. i was proud last year to work with some of my colleagues on this committee as we worked through historic tax reform bill. as you're aware of, portions of that eliminated the individual mandate tax penalty. obamacare mandate was probably

the most unpopular element of that law and its penalty. disproportionately affected and othersg nevadans across the country struggling to , get by. repealing that mandate restores individuals' ability toss make their own choices about health insurance and prevents federal government from penalizing these individuals who cannot aforth this insurance. so i guess my main question to you as we've discussed both in my office and will discuss here is where will under your leadership will hhs -- what will improve, what are you looking for in quality of access, affordable care, some of these issues as we are trying to move forward? clearly, with you in this position, i am pleased to see you here and taking time to answer these essence, but we really need to look at affordability and access,

,ealth care for nevadans affordability for all americans. mr. azar: the way we're doing it now is not working for everybody. that's going to be, if i'm confirmed, my job to take whatever i've got. the affordable care act is there. make whatever is there work as best as it possibly can. part of that is driving a system that is more affordable. more affordable insurance, more choice of insurance, insurance that actually gets them access to providers, so not a meaningless card for them but real access. finally, insurance that fits their needs as opposed to what i happen to say they should have. and i want to work with states like nevada and others to come up with different approaches. there's no one size fits all. also there's not necessarily one right answer here. this is very complex. heller: how do you feel

about -- the office of graham eller bail, have you formed an opinion on that, portions you do like or perhaps dislike? mr. azar: with the graham/cassidy heller legislation, the elements that are very positive are empowering states to run their budgets. right now the way we run our medicaid system, for instance, as you know is the matching system. if the state comes up with more money, things just increase from the federal government. it also means running that program, it's not all their money. they don't always exercise the createativity or fiscal fraud waste and stewardship as if they own 100% of the money so i think the incentives can be reoriented in a very positive way be more state in, as you would see in graham-cassidy-heller. heller: in your opening

statement, you talked more about access and competition. and one of the proposals i have here in congress is competition and that is access across state lines. you know, you can get your car insurance, your house insurance, you can insure anything across state lines except your health care. you can even get, i guess, your car insurance from some lizard in connecticut, the way it works now. have you advocated for this? how do you feel about access across state lines? i know the president has pushed hard to allow this kind of competition, this kind of access. and i think this is the next step. i think the administration agrees with that. just wondering what your opinion was. mr. azar: i am supportive of those efforts. frankly, anything that can help increase choice, as you said, access and choice, more options available to patients and consumers of what they can buy. the more likely they're going to find something that's affordable for them and that works for them.

heller: i only have a short time left, with the chairman, but what we're looking at is shortage. according to the medical association of medical colleges, 150,000 physicians by 2020, what effort do you anticipate that will be needed to cover those shortages? mr. azar: that's a vexing problem. we have programs, of course, at hhs that help with physician shortages and support training, whether it's graduate medical education or the health professions programs. for instance the tuition , subsidies and reimbursement program. some are directed towards underserved. the most rural and remote areas. i think -- it's going to be an enduring challenge for us. i would love your ideas if you've got any on how to address that shortage. mr. heller: and i'll end with this, mr. chairman, but i did introduce legislation last year with senator nelson, called the

residential physicians shortage reduction act. and i hope we have a chance and opportunity to take a look at this legislation which would allow medicare-supported residency of over 15,000 in the next five years. i appreciate your help and support and your chairmanship on this committee. you will certainly be missed. thank you, mr. chairman. chairman: senator brown: senator brown thank you for your earlier : comments in support of c.h.i.p. i appreciate that. i know you were there at the creation. i hope you can convince leader mcconnell, who frankly has resisted moving on c.h.i.p. september, october, november, december, and now it's january. i hope you can use your gravitas and hard work to convince him to do the right thing. chairman we'll get it done. :mr. brown thank you. : 2016, 4,000 ohians, one of your home states, died from opioid over dose, more than any other state in the country. 11 people in my state a day. you say if confirmed, one of your top priorities will be addressing our nation's opioid epidemic.

i am appreciative of that. you said we are in a state of war. yes or no, will you commit to prioritizing this issue? absolutely. mr. brown: thank you. we obviously need stronger leadership than we have seen. we need the president more engaged. we need the secretary of hhs more engaged as part of the comp approach.ensive will you commit to holding the integrity of medicaid? mr. azar: if we look at changes to medicaid, the issues of how we address people who are suffering from substance abuse that are currently getting service under medicaid is obviously something we would have to look at and meet that need if there's any different structure. mr. brown let me stop you there. : i have heard both you use the term able-bodyied adults a lot when speaking about medicaid. it's clear you both have given medicaid reform the idea of work requirements and medicaid a great deal of thought. let me ask you this. does an individual who has been diagnosed with severe mental illness or a substance use disorder, is that person able-bodied? mr. azar: i don't have a

definition in hand. it would be something we would work on with congress. i would share your concern. that would seem a pretty obvious -- mr. brown you have no definition : of able-bodied adult that would be appropriate for differentiating among, between and among medicaid recipients you can share with us? mr. azar: i just have -- philosophically, i would like us to work in our programs to help avoid any type of cliffs that we have in benefits to try to smooth out the approaches so that individuals have an incentive -- mr. brown: i am sorry to cut you off. you can understand our skepticism and concern that we hear top elected officials and appointed officials in this country talk about able-bodied adults and disqualifying them from medicaid, and then we realize that my state, 200,000 right now, 200,000 ohians are getting medicaid, are getting opioid treatment who are getting it because of the affordable care act, mostly through medicaid.

i was with a gentleman in cincinnati at the talbott house, sitting next to him and his 30-year-old daughter. he turned to me and said she wouldn't be alive if it weren't for medicaid. so you spent six years working at hhs. many of those was as general counsel, and you looked at definitions of medicaid and much else. if confirmed, you'll be in charge of regulation. that's why all of us want to know exactly how you could rationalize requiring individuals struggling with an illness, whether it's cancer, whether it's opioid addiction, whether it's some kind of severe mental illness, how you will rationalize requiring individuals struggling with those illnesses to work in order to remain eligible, especially when such a requirement is in direct -- indirect -- contradiction to the objectives of medicaid program. i mean, if you consider someone with cancer to be able-bodied, what about an individual diagnosed with depression? i would like you to do this. i would like you to please submit your proposed definition

of able-bodied adult to this committee, included in today, in the record included in today's hearings before this committee , votes on your confirmation. mr. azar: senator, i don't have a proposed definition of able-bodied. your're impugning to me a desire i have not stated. i want to work on are there ways we can make the program be customized to the different types of beneficiaries. i have never singled out and said -- brown: i do not question your motives, and i understand that, but i have sat here and seen members of this committee, all of whom have insurance provided by taxpayers, trying to strip medicaid away from, as my governor, a republican and i, a democrat, have fought to keep medicaid in place, to keep the expansion in place. virtually everybody on the other side of the room here has voted to cut medicaid eligibility, to throw many of those 200,000, 200,000 ohioans right now getting opioid treatment who get it because the affordable care act, and they, getting government insurance themselves,

are willing to take it away. i apologize, perhaps, but excuse my skepticism that nobody in your department, ms. verna, you, you're not there yet, i understand, have thought about what the definition of able-bodied is? then you come in here, senator nelson's comments about you have blown a hole in the budget deficit. this committee did that. thank you very much. and we have to close that huge hole. you go after things that generally conservatives don't like, medicare, social security, medicaid, unemployment insurance to cover this hole. what happens to these people? i hope, and my time has run out, but i hope you will think about those 200,000 people in the state you lived in for part of your childhood, how they will lose -- they will lose their opioid addiction treatment coverage if this administration does what it tried to do earlier. i know you said president trump is living up to his promise not to touch medicaid or medicaid and social security, but the

fact is he isn't because he wanted to sign a bill that would strip medicaid from those 200,000 ohioans. and i just need answers for that. thank you, mr. chairman. chairman: senator mccaskill. mccaskill: thank you p a were the chairman at the company. thank you for your willingness to serve the public. which was larger in the last year you were in charge, the budget for research and development or the budget for advertising? mr. azar: the budget for research and development should have been. i think the budget at eli lilly for r&d was $5 billion out of $20 billion. mccaskill: how much for

advertising? mr. azar: i don't know that number. it would have been vastly smaller. you mindill: would getting me that figure? mr. azar: i would not be able to. i have been gone from eli lilly for over a year. mccaskill: overall, the cost of advertising has dramatically gone up for pharmaceutical companies in this country. americans know it because you can't watch an hour of tv without being told to what you should ask your doctor to prescribe for you. do you believe the american taxpayer should be subsidizing consumer advertising. mr. azar: i share your concern. ccaskill: i can be thin, i can be happy, i can even -- i mean, the one that kills me is the one for erectile dysfunction

where they have them in two bathtubs. how crazy is that? that isn't happening. it's nuts. i just do not understand why the american taxpayer is subsidizing this gross overuse of television advertising, not for, you know, pepto bismal, not for over the counter, where you need information, but rather tell your doctor you want it. mr. azar: of course, we have taxes for business expenses across the board on so many practices in everything that we do in business. i do agree with you, though, that there are a lot of television and other consumer advertising that does seem there is so much of it out there, and i would love to work with dr. gottlieb to think at fda, is our approach and balance to how we authorize and approve direct to consumer advertiseingadvertising, is it correct, and do we have data? is it working and are patients taking the right messages. mccaskill: oh, it is working. people, the most heavily advertised are the most heavily , prescribed. my question, should taxpayers be helping foot the bill by it being deductible. capitalism, you believe in capitalism. mr. azar: i do.

mccaskill: you believe in a free market? mr. azar: i do. ill: one of the basic tenants of free market is negotiation based on volume. walmart became the behemoth they are because they negotiated with their suppliers based on volume to get lower and lower cost to them, which they then passed on to the consumer. correct? mr. azar: yes. caskill: you said earlier today that every incentive is towards higher prices in the pharmaceuticals. so do you believe that negotiation in fact would be an incentive to lower prices? mr. azar: negotiations do lower net prices off list price. they do in fact, and if succeeds quite well. ms. mccaskill: that would be an incentive. that would be an incentive that is currently in your testimony, there's no the incentives for prices right now. mr. azar: list prices.

it's not an incentive on list prices. we have negotiation that pulls down what the taxpayer pays and what the individual pays. but that list price, the incentive -- mccaskill: i am very aware there is lot going on behind the program. i'm very aware that for most folks that are getting their drugs, they're getting more and more expensive and we do not have the ability in the federal government to negotiation for lower prices based on volume. mr. azar: we actually do. ll: no, we don't. we don't on medicare. mr. azar: the largest prescription benefit programs get the best net pricing of any commercial payers in the united states. negotiating for lower prices, it will not make any difference in the prices. mr. azar: there is no provision for negotiating for lower prices. that's happening right now. the government has these entities that do that negotiation. mccask they couldi do itl

directly, andl, by the way:, wouldn't that save us money? no, no, there is a middle man now. there's a middleman now doing that negotiation. it's not the government. mr. azar: right, and they do it better than the government would right now. mccaskill: the benefit is a government benefit. so if you take -- you're saying because it's private sector, we should pay somebody to do it in the middle because the government can't do it? mr. azar: what we should do is those techniques that drive such good net pricing in part d, what can we take from the learning there into part b where i would focus, part b, which is physician administered drugs where we pay sticker price plus the mark-up on that. ms. mccaskill: right. mr. azar: no negotiation out of the government or any other entity can we take learning from how we're managing to be under budget in part d on our expenses and managing a program people

enjoy and have satisfaction and take some of those for part b, and if we can drive prices down, that hits the patient, the senior citizen out of pocket because they pay a percent of the medicare reimbursement out of pocket. caskill: i will work with you on that. the pharmaceutical industry wanted that in the law for a reason. they lobbied for it. the guy who helped get it through went to run pharma after he finished getting it through. it wasn't average consumers that wanted to make sure that it was. illegal to negotiate for lower prices. it was pharma. and they were powerful, and they did it. i refuse to believe that they did not want it there for a reason. chairman: thank you, senator. senator cantwell. cantwell: thank you, mr. chairman. in light of your news of your decision, i wanted to thank you for your work on the low-income

housing tax credit, not just this year but for several years in making sure that program continues to work cost effectively. chairman thank you so much. : could i make one comment before you begin? i believe having listened to senator brown's questioning, i believe senator mcconnell is supportive of our c.h.i.p. agreement. and i hope that our colleagues on the other side, especially senator brown, will help convince senator schumer to support this as well. well, i have not seen it so far. >> mr. chairman? chairman: yes. >> i spoke on the floor yesterday, and senator schumer came right after me and said he was very much committed to our legislation, our bipartisan legislation, so thank you for that. chairman: ok. senator cantwell. cantwell: thank you, mr. chairman. i would be remiss not to mention i met with my provider community

on the c.h.i.p. issue, and the level of anxiety in making sure we have continuity, notices that patients are getting is starting to definitely cause anxiety. but, anyway i wanted to go back , to medicaid, if i could. our expansion was over 600,000. and our uninsured rate was cut by 60%, uncompensated care was slashed. so to me, the expansion has been a success. do you support an end or sunset or curtailing of the medicaid expansion? mr. azar: so i want to implement the program we've got. if we end up looking at any changes on the affordable care act medicaid expansion, i don't believe any of the proposals the president or i would support involve cutting medicaid or cutting the expansion. but rather slowing the rate of growth over the next 10 years in the interest of sustainability. that's my understanding of the math on that. ms. cantwell: so you're saying you actually support the block granting?

mr. azar: whether it's block granting or other changes. block granting, the devil there is in the details. is there enough money for the program? you would have to figure out appropriate formulas and approaches around what the amount of money there. there is a that can appeal from notions of block granting because i think it helps the lines and the incentives where the states have the empowerment and the accountability to manage the dollars as their own, as washington does, really be creative and customizethe use of the program and stretch it for their citizens. so i do think there's much that can be appealing. senator cantwell: listen, i get you're a nominee by this administration, but i want to be really clear on this point because my state has been really clear on this point. the proposals that have been considered on block granting and per capita cap, my providers have been very clear. very clear. it is no innovation. it is simply a budget mechanism to cut medicaid. and the cbo saying that it would end up cutting over 1/3 over the

next two decades, i think, is supportive of that. my support of you is going to be based on this, not because of politics of who you are or any of that, is going to be on whether i'm casting a vote to continue these policies or not. they're working, and my state will be the first, the first to innovate because we already are, and we had some conversations about that. so i just want to be clear that i view the previousproposals of block granting and per capita cap as cuts, as my provider community has made very, clear to me. they have also said that with that kind of approach, they expect a private market insurance rate to go back up. that they have seen downward pressure on the prices given the expansion. and they don't want to see those go back up. ok. do you support the delivery -- another example of that is the delivery system reforms we were able to do to get the population

to move off of long-term care to community-based care. i'm assuming you support those kinds of efforts, as a true way of reforming and driving down costs. mr. azar: as we have spoken in your office, i'm completely supportive of notions. sometimes institutional care for some individuals makes sense, but alternative, home-based, other care, i'm completely supportive of these kind of innovations. senator cantwell: what could we do to drive that to a faster implementation, because we incented states to do it under the affordable care act, but if we took a more aggressive approach, that's where you would see savings. mr. azar: i don't know where the barriers are. i don't understand it. it seems so attractive to me. i don't understand it. i would love, if confirmed, to get your ideas -- if there are things hhs is doing that are getting in the way of that, i would like to know that because i'm 100% committed on this issue. senator cantwell: do you support medicare's move from fee for

service to value-based? mr. azar: i absolutely do, one of the four priorities i would try to focus on as secretary. senator cantwell: what about the basic health plan which is part do you support the concept of allowing some states tobundle up their low end population and drive down costs? mr. azar: it seems to me, i was delighted to learn more about it from our meeting, it seems to me a very attractive notion of how one help in that transition between the medicaid eligibility and the subsidy elements of the affordable care act, i want to learn more about it, but it seems to be very attractive. senator cantwell: thank you. thank you, mr. chairman. >> senator widen. senator wyden: thank you very much. i want to make two unanimous consent requests to put documents into the record at this point, because i think mr.

azar has given incorrect answers. senator nelson, for example, asked whether he was supportive of the president's position with respect to these issues, medicare, medicaid, social security. mr. azar said that the president promised he wouldn't cut it, and he has adhered to that promise. that is simply untrue. the president's first budget proposed cutting medicaid by hundreds of billions of dollars through proposals like block grants. i would like to put the budget into the record, not the entire budget, mr. chairman, but the part that indicates the answer to senator nelson's question is incorrect. >> we'll be happy to do that, but we should let mr. azar respond to that. senator wyden: this is just a request to put information into the record. >> to further your statement, i wonder if he has any comment about that. mr. azar: i think this has to do

withwashington speak. slowing the rate of growth of a growing program is simply not a cut in my mind or the president's mind. senator wyden: well, we're talking about hundreds of billions of dollars, and the state medicaid directors point blank said, no flexibility is going to make up for the fact we're talking about hundreds of billions of dollars worth of cuts. i also ask unanimous consent, mr. chairman, that we put into the record documents from pugh trust and global data that certainly suggests the answer to senator mccaskill with respectto advertising and r&d was incorrect. in 2013, according to these documents, they spent $5.7 billion in sales and marketing and $5.5 billion on r&d, and he said that these budgets were not remotely close toeach other. >> without objection. senator wyden: let me now, if i could -- mr. azar: mr. chairman, i would

like to clarify. the senator's question is the advertising budget, which was about direct to consumer, and there is no way that waseven remotely close to $5 billion at lilly. not overallsales, general administratorive expenses. i don't have the balance sheets in front of me, so i can't speak to that, but there's no conceivable way any advertising budget was close to the r&d spending. sen. wyden: we'll let people evaluate the data. you said the two were far apart. let me go to the two questions quickly. mr. azar, weeks before the health committee, you said you supportedproposals that would wipe out the medicaid guarantee for our senior citizens. this is the guarantee that picks up the tab for two out of three older people in nursing homes. 4000 seniors in oregon each day, and you would wipe out that guarantee by folding medicaid into a block grant. i would like to know whether you

still support walking back the medicaid guarantee for these older people and again, as i indicated, the nonpartisan medicaid director stated, and i quote, no amount of flexibility, their words, not mine, are going to compensate for those types of cuts. would you like to walk back your earlier position with respect to that commitment to older people who did everything right, that they're still going to have a guarantee of nursing home coverage? >> i believe what we talked about at the health committee hearing was around the fact that block granting -- i can find a lot of appeal in block granting. as i said here and i said here, which is the devil is in the details of how one structures the notion of any type of block

grant, both in terms of the dollar amount and what strings from the government are attached to it, in terms of who needs to be covered, who is eligible but not necessary to cover. that all would need to be worked out in legislation, which we're far from. >> why don't you amplify this for the record? for the chairman's courtesy, i'm going to do the last one quickly. it looks to me like you still want a block grant which the state medicaid directors say no amount of flexibility is going to be able to compensate for those cuts. my last question you have not talked about, that's 4-a of social security, what people know as welfare. a hugely important program to help families escape poverty and find work. right now, it looks to me like the pressure of success, the major measure for success is reducing the case loads at that

program. i would like the measure of success to be finding jobs for people so you can get out of poverty. so the question is, that's not the measure today. would you work with democrats and republicans to change the measure, to actually change the program so that the measure is not reducing case loads, but it is having people find work to get out of poverty? yes or no. mr. azar: absolutely. senator wyden: thank you, mr. chairman for the extra time. >> as i understand it, senator casey has one question, and then we'll wrap it up. you have one, too? >> mr. chairman. >> go ahead. >> thank you very much, mr. chairman. mr. azar, i wanted to ask an additional question regarding the approach the administration has taken with regard to implementing the affordable care act, making our health care system work.

it came to my attention, and i think the attention of people across the country, a story in politico by efforts made by the administration to what i would argue would be sabotage the affordable care act. i have a report coming out that will outline some of those actions taken. restricting enrollment is one. canceling coverage. all kinds of efforts undertaken that resulted in us pushing to get a document from health and human services. it took months to get. now we're told that there's a new document that we referred to in a letter that we sent december 21 to mr. hargen, the acting secretary. we state, and i'm quoting from the letter, hhs has developed a list of hundreds of otheractions to sabotage health care for people nationwide. we go on to say, reference a spreadsheet. we conclude by saying please provide the spreadsheet reference above, which lists

more than 200 regulatory actions the administration is planning to take to further undermine health care. that's our request. theresponse from health and human services on january 5 said they will not turn that over. in our health committee hearing, you said the following when i asked you about faithfully implementing the affordable care act. you said, quote, my job is to faithfully implement the program that's passed by congress, whatever they are. that would include the affordable care act is the law of the land and remains such. to implement it as faithfully as possible. so my question is, in light of this recent history, history of what i would argue is sabotage, do you commit to providing that document that i referred to in the letter sent on the 21, detailing the more than 200 planned regulatory actions that

was developed and maintained by hhs? would you provide that and provide it in a timely manner without redactions? mr. azar: i'll be happy tolook at that. as a nominee, i can't commit to governmental action. i don't know if that documentwas prepared in the obama administration or during trump administration. what i can tell you is if i amconfirmed as secretary, i'm a problem solver. i want to work with you and every member of this committee and other committees here to make this program work for people as best it can. i do think changes are needed. i think statutory changes are underway, but whatever we can do, i want to make insurance affordable. i want to make it work. >> that's great. mr. azar: you have my commitment. >> i appreciate that, but this document is developed under this administration, more than 200 proposed actions, and it's hard to square your statement in the health committee and other

statements today with faithful implementation with this undermining of the affordable care act, with your support, which is evident from some other questions, for legislation that would further undermine it, especially on medicaid. but i hope that the american people will have the kind of transparency that they should have a right to expect when it comes to this kind of sabotage. thank you, mr. chairman. >> the last question, senator carper. >> thank you, oh, no. >> did you have one more question? >> i had questions, yeah. >> well, let me first go to senator mccaskill and then i'm coming to you, senator carper, and you're going to be last. senator mccaskill: senator susan collins and i did a long and thorough investigation in the committee on aging last year, on price hikes. a couple of really good poster children for hedge funds who found a drug that was being sold

for pennies and then they managed to spike them up to thousands and thousands of dollars. you have a chance to read the report from our investigation? mr. azar: i have only seen summaries of it, but i do want to look at that and get any ideas that you all were able to come up with there that we could do if i'm confirmed at hhs to work on these issues. senator mccaskill: i would appreciate that. we spent a lot of time looking at it. it's ubobscene. nobody was happy when mr. wu-tang was convicted. mr. azar: i don't know if you have worked with dr. gottlieb on this yet. he's very concerned. there's this issue of these generics distortions that have happened and how can we build more competition and invite it in. i'm very committed on that. senator mccaskill: do you believe the patent system is being abused? mr. azar: i believe there are abuses. senator mccaskill: do you believe that the orphan drug law is being abused? mr. azar: i do think we need to -- i don't know if i want to

call it abuse. i know that there are issues around continued exclusivity across all indications or expansion where there's an orphan indication. i want to look at that. it may be simply what the law provides in which case if we don't like that, that's a legislative question for us as opposed to manipulating aloophole. i don't know. i would like to learn more about that. senator mccaskill: when we were there last week, it was announced it went from zero to $15,000 a bottle. that drug has been around for decades. and they slapped $15,000 on one bottle of it. there's something really wrong here. we're all skeptical over here because of what we have been through the last 12 months. mr. azar: i hope if i'm confirmed i can earn your trust and your confidence of my treatment on these issues. senator mccaskill lead the two, because drug prices are a huge problem in the country rightnow. mr. azar: i want to work with you, and i hope a year from now, you say you proved me wrong. >> would you briefly tell us who

the folks are behind you? mr. azar: yes, thank you very much. so i'm joined by my wife jennifer, my daughter claire, my son alex, my father, dr. alex azar, who was in newark delaware, when he worked at dupont when i was a child growing up. my sister stacey and her husband mick. >> glad you're here. as governor, one of the things we focused on, family services family council, it involved half of my cabinet. we focused on the basic building block of our society, family, how do we strengthen and stabilize families. we started with a state-wide campaign on teenage pregnancy. delaware had one of the highest teen pregnancy rates in the country. we put together a bunch of kids in the state to tell us what we ought to do in a comprehensive, state-wide approach, we did it. the teen pregnancy rate is a lot lower than it used to be.

but the unplanned pregnancy rate in our country is still around 50%. one of the most reliable forms of contraception availableis something called lux. long-acting reversiblecontraception, the most reliable form of contraception. less than 10% take advantage of in-uterine devices or implants, but they work. you don't have to worry about taking them every day or stopping what you're doing and, you know, get ready for making children or not. but at any rate, what are the policy and economic barriers to expanding the use of these long-acting reversible contraceptives? what are the steps we could take to expand access to them and lower the rate of unplanned pregnancies in the united states? again, roughly half of the pregnancies are unintended. a lot of them are young people involved. mr. azar: i'm not as

knowledgeable as i would like to be and would love to learn mow about it from you. i would assume we provide it through title 10 at hhs. if there are barriers, i would love to learn more about it from you. you have studied this more than i have. >> i believe in going after root causes. a lot of times, people say one of the big problems in our society is poverty. i think it was marion wright eagleman who said you can take a 16-year-old girl who is in high school, she becomes pregnant. has a child, drops out of school, doesn't marry the father. the there's an 80% chance they'll live in poverty. same 16-year-old girl does not become pregnant, does not drop out of school, waits to 21 to have a child, and marries the father of the child. the likelihood that family will end up in poverty is 8%. 80% on the one hand, 8% on theother. when i found out that, i got serious. last year, i think massachusetts under the leadership of governor charlie baker, very impressive government there, very

impressive leader. they passed legislation to require all health insurance plans to cover birth control without cost sharing. i want to ask -- again, this may not be a fair question, if it's not, you can say so, but do you agree with the massachusetts requirement that all health insurance plans in their state should cover all forms of birth control without cost sharing? >> i have no issue with states making those choices. that's exactly the kind of competition states making choices like that, that's what they ought to be doing, is making their choices about how to run their health system. >> all right, thank you. senator mccaskill was asking a question as i came in the room on drug pricing. and i hope i'm not going to cover the same territory, but let me ask this question nonetheless. if you'll bear with me,i appreciate it. the current administration has repeatedly promise said to tackle high drug prices. they neglected to back up the rhetoric with meaningful results. several drug companies have tried to address the challenge

of high drug prices with more price transparency and proposals for value-based pricing. what regulatory and statutory barriers impede the use of value-based pricing to lower drug costs? and as hhs secretary, how will you bring together the drug companies, one of which you used to lead, how would you bring together pharmacy benefit managers, health insurers, to establish value-based drug pricing proposals that can be implemented quickly to bring some relief to consumers? mr. azar: so, it's a great question. you put your finger on one of the key issues. how can we have outcome-based, value-based, you pay for the value you're getting on the drug. one of the biggest barriers is the price reporting regulations that hhs has. it really has to do with how you report over time, because of course, you're striking an agreement and paying for a drug here, but then it might be several quarters later until you

get the data on the results. and the problem is then you would end up having a true-up or a change on past price reporting, which is generally not viewed as a good thing. so i do believe this is within hhs's jurisdiction. if i'm there, we can fix that and we can address that to create pathways where you can really put your money where your mouth is and support the value on the drug. if it doesn't deliver, then pay more discounting or rebates in return. i actually think this is very actionable, senator. >> that's great. i want to commend you on your choice of people to sit up there with you at the beginning of the hearing. mike leavitt succeeded me as chair of the national governors association. tommy thompson from wisconsin, who preceded all of us as chairman of the nga. one ofmy favorite people, loved being their colleague. you couldn't have two finer people sitting next to you. you got good ones sitting behind you as well. one of them i worked with at dupont for many years.

my wife is retired from dupont. went to work there over 35 years ago and had a great career there. we love dupont in our state. thanks. good luck and congratulations. mr. azar: thank you. >> ok, well, we finally got to the end. i want to thank you for what i consider to be a very elevated testimony. there's no question in my mind, and there shouldn't be in anyone's mind, of your competence and your abilities to be able to handle this very, very important job. in all the time i have served in the united states senate, i have worked with hhs and other agencies as well. and i have to say that you're one of the best public servants that i have seen in the whole time that i have been here. and i think you handled yourself very well in front of this committee, and hopefully we can get you up and out as soon as we possibly can. so with that, i just want to

welcome your family and thank them for sitting through this. and i'm going to come back and say hello to everybody, but god bless you, and with that, we'll recess until further notice. [gavel] [captions copyright national cable satellite corp. 2017] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national

cable satellite corp. 2017]

>> congress returns next tuesday facing a government shut down deadline on jenny i-19. the houses back. the senate is also back when lawmakers will consider extending the fires at -- the fisa act. now deputy attorney general rod rosenstein on the role of prosecutors, the rule of law and justice department investigations at the forum clu